Himachal Pradesh High Court
Date Of Decision: 18.10.2024 vs State Of H.P. & Others on 18 October, 2024
Author: Sandeep Sharma
Bench: Sandeep Sharma
2024:HHC:10204
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr.MMO No.1261 of 2023
Date of Decision: 18.10.2024
_______________________________________________________
Kusum Lata Guleria …….Petitioner
Versus
State of H.P. & others … Respondents
_______________________________________________________
Coram:
Hon’ble Mr. Justice Sandeep Sharma, Judge.
Whether approved for reporting? 1 Yes.
For the Petitioner: Mr. Vikrant Thakur, Mr. Vishal Singh Thakur
and Mr. Shubham Singh Guleria, Advocates.
For the Respondents: Mr. Rajan Kahol, Mr. Vishal Panwar and Mr.
B.C.Verma, Additional Advocate Generals,
with Mr. Ravi Chauhan, Deputy Advocate
General, for respondent/State.
_______________________________________________________
Sandeep Sharma, Judge(oral):
Through, instant petition filed under Section 482 of the
Code of Criminal Procedure, petitioner herein, besides making prayer
to set aside the summoning order dated 13.09.2017, issued by
learned Chief Judicial Magistrate, Kangra at Dharamshala, in case
No.59 of 2017, has also prayed for quashing of criminal proceedings
on the ground that neither company, which has allegedly committed
offence punishable under Sections 3(d), 4(b) and 4(c) of the Drugs
and Magic Remedies Act, 1954 (for short ‘Act’) has been arrayed as
an accused nor Court concerned, while issuing process, has bothered
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Whether the reporters of the local papers may be allowed to see the judgment?
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to apply its mind to the allegations contained in the complaint as well
as material adduced alongwith the same.
2. Precisely, the facts of the case as emerge from the
record are that on 29.08.2017, a complaint came to be filed before
the learned Chief Judicial Magistrate, Dharamshala, District Kangra,
Himachal Pradesh against the Directors of the Company registered
under the name and style of Kangra Herb Private Limited for their
having allegedly violated sections 3(d), 4(b) and 4(c) of the Drugs
and Magic Remedies Act, 1954 punishable under Section 7(a) and 9
of the Act (Annexure P-4), alleging therein that on 15.03.2017,
complainant received a complaint from the Director of Ayurveda
against T.V. Commercial of M/s Kangra Herbs Private Limited
received from Advertising Standards Council of India vide letter dated
08.03.2017. Vide aforesaid complaint authority, as named
hereinabove, alleged that company wrongly claimed in the
advertisement given on the “total T.V” that drugs manufactured by it
successfully cure incurable disease like Liver Cirrhosis and
Parkinson as given under Schedule ‘J’ of Drugs and Cosmetic Rules
1945 read with Rule 106 of the Drug and Cosmetic Rules and also
3(d), 3(d)(i), 4(b), 4(c) and 7(a) of Drugs & Magic Remedies Act,
1954. After receipt of aforesaid complaint, matter was investigated by
the Drug Inspector of the area concerned, who gave adequate
opportunity to the company/firm to produce relevant record pertaining
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to the allegations contained in the complaint. Drug Inspector after
having investigated the matter in detail found that firm comprising of
five Directors as per MOA have contravened sections 3(d), 4(b) and
4(c) of the Act, punishable under Section 7(a) of the said Act and
accordingly, presented the complaint in the Court of learned Chief
Judicial Magistrate, Kangra at Dharamshala, Himachal Pradesh
against five Directors of the company, but without impleading
company/firm as an accused. Court, as detailed hereinabove, having
taken note of allegations contained in the complaint, proceeded to
issue process against the Directors of the company including the
present petitioner by way of order dated 13.09.2017.
3. During the pendency of the complaint before the
competent court of law, petitioner herein filed an application under
Sections 258, 203 and 245(2) of the Code of Criminal Procedure
(Annexure P-8), praying therein to drop the criminal proceedings
against her on the ground that no offence, if any, ever came to be
committed by her under Sections 3(d), 4(b) and 4(c) of the Act.
Precisely, petitioner claimed before the Court below that as per
notification issued on 21st December 2018 vide G.S.R. 1230(E) Rule
170, prohibition came to be imposed qua the advertisement of
Ayurvedic, Sidha or Unani Drugs, whereas prior to issuance of
aforesaid notification, there was no prohibition, if any, for issuing
advertisement of Ayurvedic, Siddha and Unani Drugs.
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4. Learned Chief Judicial Magistrate, Kangra at
Dharamshala though found force in the afore submission made on
behalf of the petitioner, but yet refused to allow the application on the
ground that criminal proceedings cannot be dropped while exercising
power under section 258 Cr.P.C in summons case, rather in such like
situation, appropriate remedy, if any, to the petitioner is to file revision
petition under Section 397 Cr.P.C or petition under Section 482
Cr.P.C in the competent Court of law. In the aforesaid background,
petitioner has approached this Court in the instant proceedings,
praying therein to quash and set aside summoning order as well as
complaint.
5. Precisely, the grouse of the petitioner as has been
highlighted in the petition and further canvassed by Mr. Vikrant
Thakur, learned counsel for the petitioner, is that though bare perusal
of the complaint filed by the Drug Inspector, nowhere suggests that
petitioner herein had specific role with regard to issuance of
advertisement, if any, qua Ayurvedic medicines manufactured by firm
namely, Kangra Herbs Private Limited, but even otherwise no criminal
prosecution could have been launched against her being one of the
Director of the company without arraying the company as an accused.
He further submitted that as per the own reply filed by the respondent
to the application filed by the petitioner under Section 258 Cr.P.C,
praying therein to drop the criminal proceedings, clearly reveals that
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advertisement of drug in question was not banned upto 31st
December, 2018, rather ban to advertise drug in question came to be
imposed on 21st December, 2018, whereas offence, if any, alleged to
have been committed by the petitioner pertains to 25.09.2016, if it is
so, complaint, if any, filed against the petitioner ought to have been
rejected at its threshold. Lastly, learned counsel for the petitioner
submitted that petitioner herein was a sleeping partner and at no point
of time, played any active role in manufacturing as well as
advertisement of the drug in question. He further submitted that after
October, 2019, petitioner ceased to be Director as she resigned from
the directorship and after that she otherwise could not have been held
liable for the act, if any, of the company. He further stated that since
there is no whisper, if any, with regard to role played by the petitioner
in advertising the drug in question, she could not have been
prosecuted merely on account of her being partner of the company,
which had allegedly issued advertisement, especially when company
never came to be arraigned as an accused. To substantiate his
aforesaid submission, he specifically invited attention this Court to
judgment dated 4th July 2024 passed by this Court in Cr.MMO No.738
of 2021, titled Anil Mediratta and others versus State of Himachal
Pradesh and others, wherein this Court having taken note of number
of judgments passed by Hon’ble Apex Court, held that Director of the
Company cannot be prosecuted without there being impleadment of
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the company as an accused, especially when offence alleged to have
been committed is attributed to the company.
6. To the Contrary, Mr. Rajan Kahol, learned Additional
Advocate General, supported the impugned action of filing the
complaint against the petitioner being Director of the Company as well
as issuance of process. He submitted that material collected on
record by the complainant, clearly reveals that petitioner was
responsible for day to day functioning and conduct of the business
alongwith other directors and as such, she rightly came to be booked
under relevant provisions of law. He further submitted that process in
the case at hand was issued in the year, 2017 and thereafter,
petitioner not only subjected herself to the jurisdiction of the
competent court of law, but also kept on contesting the case on merit
and as such, she is otherwise estopped at this stage to lay challenge
to summoning order that too on the ground that no prosecution could
have been launched against her without arraying the company as an
accused. While referring to Sections 3 and 4 of the Act, learned
Additional Advocate General states that afore provision of law clearly
bars issuance of advertisement of Ayurvedic drug and as such,
petitioner has been rightly booked under aforesaid provision of law for
her having allegedly given misleading advertisement on “total T.V” on
25.9.2016. He also submitted that it is also not in dispute that at the
time of issuance of advertisement, petitioner was Director of the
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Company. Lastly, learned Additional Advocate General submitted that
petition under Section 482 Cr.P.C is not maintainable, especially
when complaint, sought to be quashed, is already fixed for
consideration on charge. He further submitted that there is
overwhelming evidence adduced on record suggestive of the fact
petitioner has contravened various provisions contained under the Act
and as such, it would be too premature at this stage to conclude that
no case muchless under sections 3(d), 4(b) and 4(c) of the Act is
made out against the petitioner.
7. I have heard learned counsel for the parties and perused
material available on record.
8. Before ascertaining the genuineness and correctness of
the submissions and counter submissions having been made by the
learned counsel for the parties vis-à-vis prayer made in the instant
petition, this Court deems it necessary to discuss/elaborate the scope
and competence of this Court to quash the criminal proceedings while
exercising power under Section 482 of Cr.PC.
9. A three-Judge Bench of the Hon’ble Apex Court in case
titled State of Karnataka v. L. Muniswamy and others, 1977 (2)
SCC 699, held that High Court while exercising power under Section
482 Cr.PC is entitled to quash the proceedings, if it comes to the
conclusion that allowing the proceeding to continue would be an
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abuse of the process of the Court or that the ends of justice require
that the proceeding ought to be quashed.
10. Subsequently, in case titled State of Haryana and
others v. Bhajan Lal and others, 1992 Supp (1) SCC 335, the
Hon’ble Apex Court while elaborately discussing the scope and
competence of High Court to quash criminal proceedings under
Section 482 Cr.PC laid down certain principles governing the
jurisdiction of High Court to exercise its power. After passing of
aforesaid judgment, issue with regard to exercise of power under
Section 482 Cr.PC, again came to be considered by the Hon’ble Apex
Court in case bearing Criminal Appeal No.577 of 2017 (arising out of
SLP (CrL.) No. 287 of 2017) titled Vineet Kumar and Ors. v. State of
U.P. and Anr., wherein it has been held that saving of the High
Court’s inherent powers, both in civil and criminal matters, is designed
to achieve a salutary public purpose i.e. court proceedings ought not
to be permitted to degenerate into a weapon of harassment or
persecution.
11. The Hon’ble Apex Court in Prashant Bharti v. State
(NCT of Delhi), (2013) 9 SCC 293, relying upon its earlier judgment
titled as Rajiv Thapar and Ors v. Madan Lal Kapoor, (2013) 3 SCC
330, reiterated that High Court has inherent powers under Section
482 Cr.PC., to quash the proceedings against an accused, at the
stage of issuing process, or at the stage of committal, or even at the
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stage of framing of charge, but such power must always be used with
caution, care and circumspection. In the aforesaid judgment, the
Hon’ble Apex Court concluded that while exercising its inherent
jurisdiction under Section 482 of the Cr.PC, Court exercising such
power must be fully satisfied that the material produced by the
accused is such, that would lead to the conclusion, that his/their
defence is based on sound, reasonable, and indubitable facts and the
material adduced on record itself overrule the veracity of the
allegations contained in the accusations levelled by the
prosecution/complainant. Besides above, the Hon’ble Apex Court
further held that material relied upon by the accused should be such,
as would persuade a reasonable person to dismiss and condemn the
actual basis of the accusations as false. In such a situation, the
judicial conscience of the High Court would persuade it to exercise its
power under Section 482 of the Cr.P.C. to quash such criminal
proceedings, for that would prevent abuse of process of the court, and
secure the ends of justice. In the aforesaid judgment titled as
Prashant Bharti v. State (NCT of Delhi), (2013) 9 SCC 293, the
Hon’ble Apex Court has held as under:-
“22. The proposition of law, pertaining to quashing of
criminal proceedings, initiated against an accused by a
High Court under Section 482 of the Code of Criminal
Procedure (hereinafter referred to as “the Cr.P.C.”) has
been dealt with by this Court in Rajiv Thapar & Ors. vs.
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Madan Lal Kapoor wherein this Court inter alia held as
under: (2013) 3 SCC 330, paras 29-30)
29. The issue being examined in the instant case is the
jurisdiction of the High Court under Section 482 of the
Cr.P.C., if it chooses to quash the initiation of the
prosecution against an accused, at the stage of issuing
process, or at the stage of committal, or even at the stage
of framing of charges. These are all stages before the
commencement of the actual trial. The same parameters
would naturally be available for later stages as well. The
power vested in the High Court under Section 482 of the
Cr.P.C., at the stages referred to hereinabove, would have
far reaching consequences, inasmuch as, it would negate
the prosecution’s/complainant’s case without allowing the
prosecution/complainant to lead evidence. Such a
determination must always be rendered with caution, care
and circumspection. To invoke its inherent jurisdiction
under Section 482 of the Cr.P.C. the High Court has to be
fully satisfied, that the material produced by the accused is
such, that would lead to the conclusion, that his/their
defence is based on sound, reasonable, and indubitable
facts; the material produced is such, as would rule out and
displace the assertions contained in the charges levelled
against the accused; and the material produced is such, as
would clearly reject and overrule the veracity of the
allegations contained in the accusations levelled by the
prosecution/complainant. It should be sufficient to rule out,
reject and discard the accusations levelled by the
prosecution/complainant, without the necessity of
recording any evidence. For this the material relied upon
by the defence should not have been refuted, or
alternatively, cannot be justifiably refuted, being material of
sterling and impeccable quality. The material relied upon
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by the accused should be such, as would persuade a
reasonable person to dismiss and condemn the actual
basis of the accusations as false. In such a situation, the
judicial conscience of the High Court would persuade it to
exercise its power under Section 482 of the Cr.P.C. to
quash such criminal proceedings, for that would prevent
abuse of process of the court, and secure the ends of
justice.
30. Based on the factors canvassed in the foregoing
paragraphs, we would delineate the following steps to
determine the veracity of a prayer for quashing, raised by
an accused by invoking the power vested in the High Court
under Section 482 of the Cr.P.C.:-
30.1 Step one, whether the material relied upon by the
accused is sound, reasonable, and indubitable, i.e., the
material is of sterling and impeccable quality?
30.2 Step two, whether the material relied upon by the
accused, would rule out the assertions contained in the
charges levelled against the accused, i.e., the material
is sufficient to reject and overrule the factual assertions
contained in the complaint, i.e., the material is such, as
would persuade a reasonable person to dismiss and
condemn the factual basis of the accusations as false.
30.3 Step three, whether the material relied upon by
the accused, has not been refuted by the
prosecution/complainant; and/or the material is such,
that it cannot be justifiably refuted by the
prosecution/complainant?
30.4 Step four, whether proceeding with the trial would
result in an abuse of process of the court, and would
not serve the ends of justice?
30.5 If the answer to all the steps is in the affirmative,
judicial conscience of the High Court should persuade
it to quash such criminal – proceedings, in exercise of
power vested in it under Section 482 of the Cr.P.C.
Such exercise of power, besides doing justice to the
accused, would save precious court time, which would
otherwise be wasted in holding such a trial (as well as,
proceedings arising therefrom) specially when, it is
clear that the same would not conclude in the
conviction of the accused.”
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12. It is quite apparent from the bare perusal of aforesaid
judgments passed by the Hon’ble Apex Court from time to time that
where a criminal proceeding is manifestly attended with mala fide
and/or where the proceeding is maliciously instituted with an ulterior
motive for wreaking vengeance on the accused and with a view to
spite him/her due to private and personal grudge, High Court while
exercising power under Section 482 Cr.PC can proceed to quash the
proceedings.
13. Recently, the Hon’ble Apex Court in case tilted Anand
Kumar Mohatta and Anr. v. State (Government of NCT of Delhi)
Department of Home and Anr, AIR 2019 SC 210, has held that abuse
of process caused by FIR stands aggravated if the FIR has taken the
form of a charge sheet after investigation and as such, the abuse of
law or miscarriage of justice can be rectified by the court while
exercising power under Section 482 Cr.PC. The relevant paras of the
judgment are as under:
16. Even otherwise it must be remembered that the
provision invoked by the accused before the High Court
is Section 482 Cr. P.C and that this Court is hearing an
appeal from an order under Section 482 of Cr.P.C.
Section 482 of Cr.P.C reads as follows: –
“482. Saving of inherent power of the High Court.-
Nothing in this Code shall be deemed to limit or affect
the inherent powers of the High Court to make such
orders as may be necessary to give effect to any order
under this Code, or to prevent abuse of the process of
any Court or otherwise to secure the ends of justice.”
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17. There is nothing in the words of this Section which
restricts the exercise of the power of the Court to
prevent the abuse of process of court or miscarriage of
justice only to the stage of the FIR. It is settled principle
of law that the High court can exercise jurisdiction under
Section 482 of Cr.P.C even when the discharge
application is pending with the trial court ( G. Sagar Suri
and Anr. V. State of U.P. and Others, (2000) 2 SCC 636
(para 7), Umesh Kumar v. State of Andhra Pradesh and
Anr. (2013) 10 SCC 591 (para 20). Indeed, it would be a
travesty to hold that proceedings initiated against a
person can be interfered with at the stage of FIR but not
if it has advanced, and the allegations have materialized
into a charge sheet. On the contrary it could be said that
the abuse of process caused by FIR stands aggravated
if the FIR has taken the form of a charge sheet after
investigation. The power is undoubtedly conferred to
prevent abuse of process of power of any court.”
14. Recently, the Hon’ble Apex Court in case titled Pramod
Suryabhan Pawar v. The State of Maharashtra and Anr, (2019) 9
SCC 608, has elaborated the scope of exercise of power under
Section 482 Cr.PC, the relevant para whereof reads as under:-
“7. Section 482 is an overriding section which saves the
inherent powers of the court to advance the cause of
justice. Under Section 482 the inherent jurisdiction of
the court can be exercised (i) to give effect to an order
under the CrPC; (ii) to prevent the abuse of the process
of the court; and (iii) to otherwise secure the ends of
justice. The powers of the court under Section 482 are
wide and the court is vested with a significant amount of
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discretion to decide whether or not to exercise them.
The court should be guarded in the use of its
extraordinary jurisdiction to quash an FIR or criminal
proceeding as it denies the prosecution the opportunity
to establish its case through investigation and evidence.
These principles have been consistently followed and
re-iterated by this Court. In Inder Mohan Goswami v
State of Uttaranchal5, this Court observed.
“23. This Court in a number of cases has laid down the
scope and ambit of courts’ powers under Section 482
CrPC. Every High Court has inherent powers to act ex
debito justitiae to do real and substantial justice, for the
administration of which alone it exists, or to prevent
abuse of the process of the court. Inherent power under
Section 482 CrPC can be exercised:
(i) to give effect to an order under the Code;
(ii) to prevent abuse of the process of the court, and
(iii) to otherwise secure the ends of justice.
24. Inherent powers under Section 482 CrPC though
wide have to be exercised sparingly, carefully and with
great caution and only when exercise is justified by the
tests specifically laid down in this section itself. Authority
of the court exists for the advancement of justice. If any
abuse of the process leading to injustice is brought to
the notice of the court, then the court would be justified
in preventing injustice by invoking inherent powers in
absence of specific provisions in the statute.”
8. Given the varied nature of cases that come before the
High Courts, any strict test as to when the court’s
extraordinary powers can be exercised is likely to tie the
court’s hands in the face of future injustices. This Court
in State of Haryana v Bhajan Lal6 conducted a detailed
study of the situations where the court may exercise its
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extraordinary jurisdiction and laid down a list of
illustrative examples of where quashing may be
appropriate. It is not necessary to discuss all the
examples, but a few bear relevance to the present case.
The court in Bhajan Lal noted that quashing may be
appropriate where, (2007) 12 SCC 1 1992 Supp (1)
SCC 335
“102. (1) Where the allegations made in the first
information report or the complaint, even if they are
taken at their face value and accepted in their entirety
do not prima facie constitute any offence or make out a
case against the accused.
(2) Where the allegations in the first information report
and other materials, if any, accompanying the FIR do
not disclose a cognizable offence, justifying an
investigation by police officers under Section 156(1) of
the Code except under an order of a Magistrate within
the purview of Section 155(2).
……….
(7) Where a criminal proceeding is manifestly attended
with mala fide and/or where the proceeding is
maliciously instituted with an ulterior motive for wreaking
vengeance on the accused and with a view to spite him
due to private and personal grudge.”
In deciding whether to exercise its jurisdiction under
Section 482, the Court does not adjudicate upon the
veracity of the facts alleged or enter into an appreciation
of competing evidence presented. The limited question
is whether on the face of the FIR, the allegations
constitute a cognizable offence. As this Court noted in
Dhruvaram Murlidhar Sonar v State of Maharashtra,
2018 SCC OnLine SC3100 (“Dhruvaram Sonar”) :
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“13. It is clear that for quashing proceedings, meticulous
analysis of factum of taking cognizance of an offence by
the Magistrate is not called for. Appreciation of evidence
is also not permissible in exercise of inherent powers. If
the allegations set out in the complaint do not constitute
the offence of which cognizance has been taken, it is
open to the High Court to quash the same in exercise of
its inherent powers.”
15. Aforesaid law, clearly stipulates that court can exercise
power under S.482 of the Code of Criminal Procedure, to quash
criminal proceedings, in cases, where the allegations made in the first
information report or the complaint, even if they are taken at their face
value and accepted in their entirety do not prima facie constitute any
offence or make out a case against the accused.
16. Now being guided by the aforesaid proposition of law laid
down by the Hon’ble Apex Court, this Court would make an endeavor
to examine and consider the prayer made in the instant petition vis-à-
vis factual matrix of the case.
17. Prayer to quash the summoning order as well as
complaint filed by Drug Inspector under relevant provision of law has
been made on behalf of the petitioner primarily on two grounds; (i) no
criminal proceedings could have been initiated against the petitioner
being one of the Director of the company without there being
impleadment of the company as an accused and ;(ii) since there was
no ban in issuing advertisement of Ayurvedic, Siddha or Unani drugs
prior to issuance of notification 21.12.2018, issued by Ministry of
Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy,
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Government of India, no criminal prosecution could have been
launched against Directors of the company including the petitioner,
especially when it is not in dispute that alleged advertisement in
violation of rules was given by the company in electronic media on
25.09.2016.
18. Admittedly, in the case at hand, petitioner herein was
Director of the Company, namely Kangra Herbs Private Limited on
25.09.2016, on which date allegedly, an advertisement came to be
issued in electronic media i.e .total T.V., claiming therein that drug
manufactured by the company, named hereinabove, cures life
threatening diseases like Liver Cirrhosis and Parkinson. It is also not
in dispute that notification, thereby banning advertisement of
Ayurvedic, Siddha or Unani Drugs came to be issued by competent
authority i.e. Ministry of Ayurveda, Yoga and Naturopathy, Unani,
Siddha and Homoeopathy, Government of India, on 21.12.2018
meaning thereby, prior to issuance of aforesaid notification, there was
no ban, if any, for issuing advertisement of Ayurvedic Medicine in the
electronic media, if it is so, criminal prosecution launched against the
petitioner being Director of the Company for their allegedly issuing
advertisement dated 25.09.2016 in electronic media i.e. total T.V is
not tenable in the eye of law, especially when precise allegation
contained in the complaint lodged against Directors of the company,
is that they, being directors, had issued advertisement in electronic
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media, claiming therein that drug manufactured by the company cures
life threatening diseases. Similarly, this Court is persuaded to agree
with learned counsel for the petitioner that till the time company,
which allegedly contravened the provision of law, as detailed
hereinabove, by issuing advertisement in electronic media is not
arraigned as an accused, no prosecution of Director of the Company
is permissible.
19. Before taking note of the law laid down by this Court as
well as Hon’ble Apex Court with regard to consequences of non-
impleadment of the company as an accused, especially in the cases
where offence alleged to be committed is attributable to the company,
it would be apt to take note of some of the Sections of the Drugs and
Magic Remedies Act,1954 under which, criminal prosecution came to
be launched against the petitioner:-
“Section -2 (Definitions).–
;(b) „drug‟ includes–
(i) a medicine for the internal or external use of human beings or
animals;
(ii) ( any substance intended to be used for or in the diagnosis,
cure, mitigation, treatment or prevention of disease in human
beings or animals;
(iii) any article, other than food, intended to affect or influence in
any way the structure or any organic function of the body of
human beings or animals;
(iv) any article intended for use as a component of any medicine,
substance or article, referred to in sub-clauses (i), (ii) and (iii);
“3. Prohibition of advertisement of certain drugs for
treatment of certain diseases and disorders.–Subject to the
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provisions of this Act, no person shall take any part in the
publication of any advertisement referring to any drug in terms
which suggest or are calculated to lead to the use of that drug
for–
(a) the procurement of miscarriage in women or prevention of
conception in women; or
(b) the maintenance or improvement of the capacity of human
beings for sexual pleasure; or
(c) the correction of menstrual disorder in women; or
2 [(d) the diagnosis, cure, mitigation, treatment or prevention of
any disease, disorder or condition specified in the Schedule, or
any other disease, disorder or condition (by whatsoever name
called) which may be specified in the rules made under this Act:
Provided that no such rule shall be made except–
(i) in respect of any disease, disorder or condition which
requires timely treatment in consultation with a registered
medical practitioner or for which there are normally no
accepted remedies; and
(ii) after consultation with the Drugs Technical Advisory
Board constituted under the Drugs and Cosmetics Act,
1940 (23 of 1940), and if the Central Government
considers necessary, with such other persons having
special knowledge or practical experience in respect of
Ayurvedic or Unani systems of medicines as that
Government deems fit.]
4. Prohibition of misleading advertisements relating to
drugs.–Subject to the provisions of this Act, no person shall
take any part in the publication of any advertisement relating to a
drug if the advertisement contains any matters which–
(a) directly or indirectly gives a false impression regarding the
true character of the drug; or
(b) makes a false claim for the drug; or
(c) is otherwise false or misleading in any material particular.”
9. Offences by companies.–
(1) If the person contravening any of the provisions of this Act is
a company, every person who, at the time the offence was
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committed, was in charge of, and was responsible to, the
company for the conduct of the business of the company as well
as the company shall be deemed to be guilty of the contravention
and shall be liable to be proceeded against, and punished
accordingly:
Provided that nothing contained in this sub-section shall render
any such person liable to any punishment provided in this act if
he proves that the offence was committed without his knowledge
or that he exercised all due diligence to prevent the commission
of such offence.
(2) Notwithstanding anything contained in sub-section (1) where
an offence under this Act has been committed by a company and
it is proved that the offence was committed with the consent or
connivance of, or is attributable to any neglect on the part of, any
director or manager, secretary or other officer of the company,
such director, manager, secretary or other officer of the
company, shall also be deemed to be guilty of that offence and
shall be liable to be proceeded against and punished accordingly.
20. Careful perusal of Section 9 of the aforesaid Act, talks about
contravention any of the provision of the Act by a company, however
to make company liable for its having contravened the provisions
contained in the act, it has been further provided in the aforesaid
provision of law that every person, who at the time the offence was
committed was In-charge of, and was responsible to, the company for
the conduct of the business of the company as well as the company
shall be deemed to be guilty of the contravention and shall be liable to
be proceeded against, and punished accordingly. If the aforesaid
provision is read in its entirety, it clearly reveals that every person,
who at the time of commission of offence by a Company, was In-
21
2024:HHC:10204
charge of, and in any manner was responsible for day to day
business of the company shall be deemed to be guilty of the
contravention alongwith company. Sub clause (2) of aforesaid
provision of law provides that notwithstanding anything contained in
sub-section (1) where an offence under this Act is committed by a
company and it is proved that the offence was committed with the
consent or connivance of, or is attributable to any neglect on the part
of, any director or manager, secretary or other officer of the company,
such director, manager, secretary or other officer of the company,
shall also be deemed to be guilty of that offence and shall be liable to
be proceeded against and punished accordingly. Expression used i.e.
“also be deemed to be guilty of that offence”, clearly indicates that
before ascertaining the wrong, if any, committed by the director of the
company, guilt, if any, of the company is also required to be
established. Till the time, offence alleged to have been committed by
the company is not proved/established, Director/Manger/Secretary or
other Officer of the company, who had allegedly consented in the
commission of the offence cannot be held guilty.
21. No doubt, prosecution of the company as well as its
Director can go simultaneously, but certainly Director of the company
cannot be criminally prosecuted without there being impleadment of
the company as an accused, especially when offence is alleged to be
committed by the company. In the case at hand, precise allegation as
22
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contained in the complaint, is that company namely, Kangra Herbs
Private Limited issued advertisement on 25.09.2016 in electronic
media i.e. on Total T.V claiming therein that drug manufactured by it
cures life threatening diseases like Liver Cirrhosis and Parkinson.
Advertisement was issued by the company, as such, it was also
required to be arraigned as an accused before initiation of criminal
prosecution, if any, against the Director of the company. As per
Sections 3 and 4 of the Act, there is prohibition on advertisement of
certain drugs for treatment of certain diseases and disorders and said
prohibition also extends to making false claims with respect to the
drugs.
22. As per Rules 106 and 170 of the Drugs and Cosmetic
Rules by way of notification dated 21.12.2018, it is evident that there
was no prohibition on advertisement of Ayurvedic, Siddha and Unani
drugs prior to the publication of aforesaid notification.
23. Section 9 of the Act, as discussed in detailed
hereinabove, does not make all the Directors liable for the offence,
rather criminal liability can be fastened only on those, who at the time
of the commission of the offence were In-charge of and were
responsible for the conduct of business of the company. However, in
the instant case, complaint nowhere discloses role, if any, played by
the petitioner in issuance of advertisement in violation of Rule-3 of the
Act.
23
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24. Reliance in this regard is placed upon the judgment
passed by this Court in Cr.MMO No.738 of 2021, titled Anil Mediratta
and others State of Himachal Pradesh and others, decided on 4th
July, 2024, wherein this Court having taken note of the law laid down
by the Hon’ble Apex Court with regard to consequences of non-
impleadment of the company as an accused, has held as under:-
“39 Till the time, company is arrayed as an accused, offence, if
any, committed by company, cannot be ascertained. For the of-
fence, if any, committed by a company, person responsible for
conduct of business of the company is to be dealt in accordance
with law, but admittedly, for doing so, such company is essentially
required to be impleaded as accused. However, in the instant case,
M/s Generica India Limited has not been arrayed as party till date.
Since aforesaid company has not been arrayed as accused, it is
not understood how prosecution would prove case against its Di-
rectors i.e. petitioners herein.
40. Reliance in this regard is placed upon a judgment ren-
dered by Hon’ble Apex Court in Aneeta Hada v. Godfather
Travels & Tours (P) Ltd., (2012) 5 SCC 661, wherein, a
similar provision enacted in the Negotiable Instruments Act
was considered by the Hon’ble Supreme Court and it was
held that prosecution of the company is sine qua non for
prosecuting the officials of the company. It is not permissible
to prosecute the officials without prosecuting the company. It
was observed:-
“58. Applying the doctrine of strict construction, we are of
the considered opinion that the commission of an offence by
the company is an express condition precedent to attract
the vicarious liability of others. Thus, the words “as well as
the company” appearing in the section make it absolutely
unmistakably clear that when the company can be
prosecuted, then only the persons mentioned in the other
categories could be vicariously liable for the offence subject
to the averments in the petition and proof thereof. One
cannot be oblivious of the fact that the company is a juristic
242024:HHC:10204
person and it has its own respectability. If a finding is
recorded against it, it would create a concavity in its
reputation. There can be situations when the corporate
reputation is affected when a Director is indicted.
59. In view of our aforesaid analysis, we arrive at the
irresistible conclusion that for maintaining the prosecution
under Section 141 of the Act, arraigning of a company as an
accused is imperative. The other categories of offenders
can only be brought in the dragnet on the touchstone of
vicarious liability as the same has been stipulated in the
provision itself. We say so on the basis of the ratio laid
down in C.V. Parekh [(1970) 3 SCC 491: 1971 SCC (Cri)
97] which is a three-judge Bench decision. Thus, the view
expressed in Sheoratan Agarwal [(1984) 4 SCC 352: 1984
SCC (Cri) 620] does not correctly lay down the law and,
accordingly, is hereby overruled. The decision in Anil Hada
[(2000) 1 SCC 1: 2001 SCC (Cri) 174] is overruled with the
qualifier as stated in para 51. The decision in Modi Distillery
[(1987) 3 SCC 684: 1987 SCC (Cri) 632] has to be treated
to be restricted to its own facts as has been explained by us
hereinabove.
41. A similar view was taken by Hon’ble Apex Court in
Dayle De’souza v. Govt. of India, 2021 SCC OnLine SC
1012, wherein it was observed:-
“24. There is yet another difficulty for the prosecution in the
present case as the Company has not been made an
accused or even summoned to be tried for the offence. The
position of law as propounded in State of Madras v. C.V.
Parekh (1970) 3 SCC 491, reads:
“3. Learned Counsel for the appellant, however, sought conviction
of the two respondents on the basis of Section 10 of the Essential
Commodities Act under which, if the person contravening an
order made under Section 3 (which covers an order under the
Iron and Steel Control Order, 1956), is a company, every person
who, at the time the contravention was committed, was in charge
of, and was responsible to, the company for the conduct of the
business of the company as well as the company, shall be
deemed to be guilty of the contravention and shall be liable to be
proceeded against and punished accordingly. It was urged that
the two respondents were in charge of, and were responsible to,
the Company for the conduct of the business of the Company
and, consequently, they must be held responsible for the sale and
for thus contravening the provisions of clause (5) of the Iron and
Steel Control Order. This argument cannot be accepted, because
it ignores the first condition for the applicability of Section 10 to
the effect that the person contravening the order must be a
company itself. In the present case, there is no finding either by
the Magistrate or by the High Court that the sale in contravention
of clause (5) of the Iron and Steel Control Order was made by the
252024:HHC:10204
Company. In fact, the Company was not charged with the offence
at all. The liability of the persons in charge of the Company only
arises when the contravention is by the Company itself. Since, in
this case, there is no evidence and no finding that the Company
contravened clause (5) of the Iron and Steel Control Order, the
two respondents could not be held responsible. The actual
contravention was by Kamdar and Vallabhdas Thacker and any
contravention by them would not fasten responsibility on the
respondents. The acquittal of the respondents is, therefore, fully
justified. The appeal fails and is dismissed.”
25. However, this proposition was later deviated from in
Sheoratan Agarwal v. State of Madhya Pradesh (1984) 4 SCC
352. This case pertained to the pari materia provision under
Section 10 of the Essential Commodities Act, 1955. The court
held that anyone among the company itself; every person in
charge of and responsible to the company for the conduct of the
business; or any director, manager, secretary or other officers of
the company with whose consent or connivance or because of
whose neglect offence had been committed, could be prosecuted
alone. However, the person in charge or an officer of the
company could be held guilty in that capacity only after it has
been established that there has been a contravention by the
company as well. However, this will not mean that the person in
charge or an officer of the company must be arraigned
simultaneously along with the company if he is to be found guilty
and punished.
26. Relying upon the reasoning in Sheoratan Agarwal (supra) and
limiting the interpretation of C.V. Parekh (supra), this Court in Anil
Hada v. Indian Acrylic Ltd. (2000) 1 SCC 1 had held that:
“13. If the offence was committed by a company it can be
punished only if the company is prosecuted. But instead of
prosecuting the company if a payee opts to prosecute only the
persons falling within the second or third category, the payee
can succeed in the case only if he succeeds in showing that the
offence was actually committed by the company. In such a
prosecution the accused can show that the company has not
committed the offence, though such a company is not made an
accused, and hence the prosecuted accused is not liable to be
punished. The provisions do not contain a condition that
prosecution of the company is sine qua non for prosecution of
the other persons who fall within the second and the third
categories mentioned above. No doubt a finding that the offence
was committed by the company is sine qua non for convicting
those other persons. But if a company is not prosecuted due to
any legal snag or otherwise, the other prosecuted persons
cannot, on that score alone, escape from the penal liability
created through the legal fiction envisaged in Section 141 of the
Act.”
26
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27. However, subsequent decisions of this Court have emphasised
that the provision imposes vicarious liability by way of deeming
fiction which presupposes and requires the commission of the
offence by the company itself as it is a separate juristic entity.
Therefore, unless the company as a principal accused has
committed the offence, the persons mentioned in sub-section (1)
would not be liable and cannot be prosecuted. Section 141(1) of the
Negotiable Instruments Act, extends vicarious criminal liability to the
officers of a company by deeming fiction, which arises only when the
offence is committed by the company itself and not otherwise.
Overruling Sheoratan Agarwal and Anil Hada, in Aneeta Hada v.
Godfather Travels and Tours Private Limited (2012)5 SCC 661, a 3-
judge bench of this court expounding on the vicarious liability under
Section 141 of the Negotiable Instruments Act, has held:
“51. We have already opined that the decision in Sheoratan
Agarwal runs counter to the ratio laid down in C.V. Parekh
which is by a larger Bench and hence, is a binding precedent.
On the aforesaid ratiocination, the decision in Anil Hada has to
be treated as not laying down the correct law as far as it states
that the Director or any other officer can be prosecuted without
impleadment of the company. Needless to emphasise, the
matter would stand on a different footing where there is some
legal impediment and the doctrine of lex non cogit ad
impossibilia gets attracted.
xxxxxxxx
59. In view of our aforesaid analysis, we arrive at the irresistible
conclusion that for maintaining the prosecution under Section 141 of
the Act, arraigning of a company as an accused is imperative. The
other categories of offenders can only be brought in the drag-net on
the touchstone of vicarious liability as the same has been stipulated
in the provision itself. We say so on the basis of the ratio laid down in
C.V. Parekh which is a three-judge Bench decision. Thus, the view
expressed in Sheoratan Agarwal does not correctly lay down the law
and, accordingly, is hereby overruled. The decision in Anil Hada is
overruled with the qualifier as stated in para 51. The decision in Modi
Distillery has to be treated to be restricted to its own facts as has
been explained by us hereinabove.”
27
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42. From the aforesaid exposition of law laid down by
Hon’ble Apex Court, it is thus clear that, a company, being a ju-
ristic person, cannot be imprisoned, but it can be subjected to
a fine, which in itself is a punishment. Every punishment has
adverse consequences, and therefore, prosecution of the
company is mandatory. The exception would possibly be when
the company itself has ceased to exist or cannot be prosecuted
due to a statutory bar. However, such exceptions are of no re-
levance in the present case. Thus, the present prosecution
must fail for this reason as well. Therefore, it is not permissible
to prosecute the petitioners without prosecuting the company.
Since the company has not been arrayed as an accused,
therefore, it is not permissible to prosecute the petitioners, be-
ing Directors of the Company, in view of the binding prece-
dents of the Hon’ble Supreme Court.
43. Reliance is also placed upon judgment rendered by
Hon’ble Apex Court in Lalankumar Singh v. State of Maha-
rashtra, 2022 (Supp.) Shim. LC 260, wherein, Hon’ble Apex
Court held as under:
“14. It could thus be seen that this Court had held that simply
because a person is a director of the company, it does not
necessarily mean that he fulfils the twin requirements of Section
34(1) of the said Act so as to make him liable. It has been held
that a person cannot be made liable unless, at the material time,
he was incharge of and was also responsible to the company for
the conduct of its business.
15. In the case of S.M.S. Pharmaceuticals Ltd. vs. Neeta
Bhalla and another, this Court was considering the question as
to whether it was sufficient to make the person liable for being a
director of a company under Section 141 of the negotiable
Instruments Act, 1881. This Court considered the definition of the
282024:HHC:10204
word “director” as defined in Section 2(13) of the Companies Act,
1956. This Court observed thus:
“8. ……. There is nothing which suggests that simply by being
a director in a company, one is supposed to discharge
particular functions on behalf of a company. It happens that a
person may be a director in a company but he may not know
anything about the daytoday functioning of the company. As a
director he may be attending meetings of the Board of
Directors of the company where usually they decide policy
matters and guide the course of business of a company. It may
be that a Board of Directors may appoint subcommittees
consisting of one or two directors out of the Board of the
company who may be made responsible for the daytoday
functions of the company. These are 4 (2005) 8 SCC 89
matters which form part of resolutions of the Board of Directors
of a company. Nothing is oral. What emerges from this is that
the role of a director in a company is a question of fact
depending on the peculiar facts in each case. There is no
universal rule that a director of a company is in charge of its
everyday affairs. We have discussed about the position of a
director in a company in order to illustrate the point that there
is no magic as such in a particular word, be it director,
manager or secretary. It all depends upon the respective roles
assigned to the officers in a company. …..”
16. It was held that merely because a person is a director of a
company, it is not necessary that he is aware about the daytoday
functioning of the company. This Court held that there is no
universal rule that a director of a company is in charge of its
everyday affairs. It was, therefore, necessary, to aver as to how the
director of the company was in charge of daytoday affairs of the
company or responsible to the affairs of the company. This Court,
however, clarified that the position of a managing director or a joint
managing director in a company may be different. This Court
further held that these persons, as the designation of their
office suggests, are in charge of a company and are responsible for
the conduct of the business of the company. To escape liability,
they will have to prove that when the offence was committed, they
had no knowledge of the offence or that they exercised all due
diligence to prevent the commission of the offence.
17. In the case of Pooja Ravinder Devidasani vs. State of
Maharashtra and another this Court observed thus:
“17. …… Every person connected with the Company will not
fall into the ambit of the provision. Time and again, it has
292024:HHC:10204
been asserted by this Court that only those persons who
were in charge of and responsible for the conduct of the
business of the Company at the time of commission of an
offence will be liable for criminal action. A Director, who was
not in charge of and was not responsible for the conduct of
the business of the Company at the relevant time, will not be
liable for an offence under Section 141 of the NI
Act. In National Small Industries Corpn. [National Small
Industries Corpn. Ltd. v. Harmeet Singh Paintal, (2010) 3
SCC 330 : (2010) 1 SCC (Civ) 677 : (2010) 2 SCC (Cri) 1113]
this Court observed: (SCC p. 336, paras 1314) 5 (2014) 16
SCC 1“13. Section 141 is a penal provision creating vicarious
liability, and which, as per settled law, must be strictly
construed. It is therefore, not sufficient to make a bald
cursory statement in a complaint that the Director (arrayed as
an accused) is in charge of and responsible to the company
for the conduct of the business of the company without
anything more as to the role of the Director. But the complaint
should spell out as to how and in what manner Respondent 1
was in charge of or was responsible to the accused Company
for the conduct of its business. This is in consonance with
strict interpretation of penal statutes, especially, where such
statutes create vicarious liability.
14. A company may have a number of Directors and to
make any or all the Directors as accused in a complaint
merely on the basis of a statement that they are in charge of
and responsible for the conduct of the business of the
company without anything more is not a sufficient or
adequate fulfilment of the requirements under Section 141.”
(emphasis in original)
18. In Girdhari Lal Gupta v. D.H. Mehta [Girdhari Lal Gupta v.
D.H. Mehta, (1971) 3 SCC 189 : 1971 SCC (Cri) 279 :AIR 1971
SC 2162], this Court observed that a person “in charge of a
business” means that the person should be in overall control of
the daytoday business of the Company.”
44. There is another aspect of the matter, that once
there is no dispute qua the fact, that M/s Generica India
Limited had appointed Mr. Hem Raj Thakur as its autho-
rized signatory, as is evident from Annexure P-1, (para 8
of complaint) and he was otherwise responsible for day-to-
day functions of the company, there was otherwise no oc-
30
2024:HHC:10204
casion, if any, for Drug Inspector concerned to implead pe-
titioners, being Directors of company as accused.
45. Once, Mr. Hem Raj Thakur being authorized sig-
natory was responsible for conduct of business of firm in
question and invoice, vide which drug was sold to M/s Aar
Kay Surgicals Sujanpur, contained his signatures, coupled
with the fact that no material came to be adduced on
record qua the fact that petitioners, being Directors of M/s
Generica India Limited were looking after day-to-day affairs
of the company, no case, if any, under S.18(a)(i), punish-
able under S.27(d) of the Act could be registered against
petitioners being Directors of company
46. This court in similar circumstances, where com-
pany was not arrayed as an accused, straightway pro-
ceeded to quash the proceedings, vide order dated
16.9.2023 passed in CrMMO No. 111 of 2013, titled
Ashish Mittal v. State of Himachal Pradesh, relevant pa-
ras whereof read as under:
“11. A similar proposition was dealt with by the Apex
Court in Aneeta Hada v. Godhfather Travels and Tours
Private Limited, (2012) 5 SCC 661, while dealing with
Section 141 of the Negotiable Instruments Act quoted
above, held that when a person, which is a Company
commits an offence, then certain categories of persons
incharge as well as the Company would be deemed to be
liable for the offences under Section 138 of the Negotiable
Instruments Act. Thus, the statutory intendment is
absolutely plain. The provision makes the functionaries and
the Companies/ firms liable and that is by deeming fiction,
which has its own significance.
12. Also on the comparative reading of the above
Sections under the different statutes, it can safely be
concluded that every person connected with Company
shall not fall within the ambit of Section 34 of the Act, which
312024:HHC:10204
has a marked similarity with the similar provisions of
Negotiable Instruments Act. The conclusion is obvious that
only those persons, who are incharge of and responsible
for the conduct of the business of the Company at the time
of commission of the offence are liable for the criminal
action. The explanation added to Section 34 ibid shows
that the Company means a body corporate and includes a
firm or other association of individuals and Directos in
relation to a firm means a Partner.
13. In the instant case, the petitioner is alleged to be a
Partner of “M/s. Legen Healthcare”. The said firm has not
been impleaded as an accused and also there is no
allegation in the complaint that the petitioner in the capacity
as a Partner was incharge of and responsible for the
conduct-business of the said firm. Therefore, in my opinion,
summoning of the petitioner for the alleged offence in his
capacity as a Partner is wrong and illegal.
14. Thus, the logical conclusion is that the summoning of
the petitioner as a Partner of the said firm as an accused is
unsustainable, hence, quashed and set aside., but,
however, it shall open to the Drug Inspector to implead the
Company as an accused by moving an appropriate
application before the learned trial Court and in case there
is any evidence during the trial that a particular person is
incharge of or responsible for the conduct of the business
or the Company including the petitioner, he can also be
impleaded as an accused. The record of learned trial Court
be returned forthwith and shall reach before it on or before
21.10.2013.”
47. In the aforesaid judgment, Coordinate Bench of this Court,
having taken note of the fact that the firm, of which petitioner in
that case was a partner, was not impleaded as an accused,
coupled with the fact that there was no allegation against the pe-
titioner, being partner or in charge or responsible for conduct of
business of said firm, held summoning of petitioner in that case
bad in law.
32
2024:HHC:10204
48. Similar is present case. In the instant case, though petition-
ers being Directors of company have been arrayed as accused,
but the company namely, M/s Generica India Limited has not
been arrayed as accused, as such, prosecution of the petition-
ers alone, is bound to fail. Most importantly, protection under
S.19(3) of Act is also available to petitioners being stock-
iest/traders, for the reason that sale of drug in question by man-
ufacture to M/s Generica India Limited has not been denied by
M/s Legen Healthcare, the admitted manufacturer of drug. It
clearly emerges from the complaint that M/s Generica India
Limited being duly licenced stockiest, purchased drug from duly
licenced manufacturer and sold the same thereafter to M/s Aar
Kay Surgicals, vide proper invoice dated 23.12.2008″.
25. In the aforesaid judgment, this Court having taken note
of the fact that firm, which allegedly violated the provisions contained
under Drugs and Cosmetic Act, was not impleaded as an accused
and no allegation ever came to be levelled in the complaint against
one of the partner of the company that he was responsible for day to
day business of the said firm, is persuaded to quash the criminal
proceedings.
26. Having scanned the entire material adduced on record,
vis-à-vis prayer made in the instant petition, this court is persuaded to
agree with Mr. Vikrant Thakur, learned counsel appearing for the
petitioner, that this court, while exercising power under S.482 Cr.P.C
may proceed to quash the complaint against the petitioner, because
continuance thereof would be sheer abuse of process of law, since,
33
2024:HHC:10204
for the reasons stated herein above, case of prosecution is bound to
fail against the petitioner in all probabilities.
27. Otherwise also, in case prayer made on behalf of the
petitioner is not accepted she would be subjected to unnecessary
ordeal of facing protracted trial, which otherwise is bound to fail.
28. In view of the detailed discussion made herein above and
law taken into consideration, present petition is allowed. Summoning
order dated 13.09.2017 as well as complaint i.e. case No.59 of 2017,
titled as State of Himachal Pradesh versus Rajesh Guleria and
others under Sections 3 and 4 of the Drugs and Magic Remedies Act,
1954, pending in the Court of learned Chief Judicial Magistrate,
Dharamshala, District Kangra, Himachal Pradesh(Annexure P-4) are
quashed and set-aside qua the petitioner. The petitioner is discharged
henceforth. All pending applications stand disposed of.
(Sandeep Sharma),
Judge
October 18, 2024
(shankar)